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Balance sheet of the agricultural sector, December 31, 2019

Released: 2020-06-18

Farm sector equity — Canada

$546.1 billion

December 31, 2019

3.5% increase

(period-to-period change)

Farm sector equity — N.L.

$0.4 billion

December 31, 2019

7.9% increase

(period-to-period change)

Farm sector equity — P.E.I.

$2.6 billion

December 31, 2019

17.8% increase

(period-to-period change)

Farm sector equity — N.S.

$2.4 billion

December 31, 2019

2.1% increase

(period-to-period change)

Farm sector equity — N.B.

$2.6 billion

December 31, 2019

14.8% increase

(period-to-period change)

Farm sector equity — Que.

$55.9 billion

December 31, 2019

3.8% increase

(period-to-period change)

Farm sector equity — Ont.

$145.1 billion

December 31, 2019

5.8% increase

(period-to-period change)

Farm sector equity — Man.

$40.6 billion

December 31, 2019

1.0% increase

(period-to-period change)

Farm sector equity — Sask.

$106.8 billion

December 31, 2019

3.5% increase

(period-to-period change)

Farm sector equity — Alta.

$152.4 billion

December 31, 2019

1.8% increase

(period-to-period change)

Farm sector equity — B.C.

$37.3 billion

December 31, 2019

3.3% increase

(period-to-period change)

Equity in Canada's farm sector totalled $546.1 billion on December 31, 2019—up 3.5% from the same date a year earlier. This was the smallest percentage increase in farm equity since 2009, as growth in land values slowed and farm debt continued to rise.

Farm equity rose in every province. Gains in Ontario and Saskatchewan accounted for just over three-fifths of the total increase.

Chart 1  Chart 1: Year-over-year percentage change in the value of total assets, total liabilities and equity, 2018 to 2019
Year-over-year percentage change in the value of total assets, total liabilities and equity, 2018 to 2019

Asset values increase on the continued appreciation of farmland

In 2019, the value of total farm assets rose 4.3%, to $655.3 billion. Farmland, valued at $449.4 billion in 2019, accounted for 83.7% of the increase in total asset values. Farmland values were up in every province, with Ontario (+6.7%) accounting for one-third of the national increase. According to Farm Credit Canada, strong demand from supply-managed operations and crop producers, combined with limited land availability, contributed to higher farmland values in Ontario (+$7.6 billion). Saskatchewan (+$5.0 billion) and Alberta (+$4.3 billion) also reported large increases in land values.

Higher quota values and continued investment in machinery also contributed to the increase in farm asset values. Lower values of crop and breeding livestock inventories moderated the increase in farm asset values.

Total liabilities increase in every province

Total liabilities increased at a faster pace than farm assets—up 8.4% to $109.2 billion at the end of 2019. This was higher than the previous five-year average annual rate of increase (+6.7%). Almost 90% of the gain was because of a 9.2% increase in long-term liabilities. Total liabilities increased in every province, with Quebec (+11.7%) accounting for almost one-quarter of the national increase.

Interest coverage ratio falls to its lowest value since 2007

The interest coverage ratio, which measures the ability of a farm business to meet its interest payments (net income before interest and taxes, divided by interest expenses), fell from 2.6 in 2018 to 2.4 in 2019—its lowest value since 2007 (1.7) and the third consecutive decline.

Chart 2  Chart 2: Efficiency ratio—interest coverage, Canada, 2005 to 2019
Efficiency ratio—interest coverage, Canada, 2005 to 2019

Debt-to-asset ratio rises again

The debt-to-asset ratio rose for the fourth time in five years—up 4.4%, to its highest level since 2009. This indicates that a higher proportion of assets were financed through debt. It is also a measure of solvency—the ability of a farm to repay debt obligations when they are due. However, profitability measures—the rate of return on farm assets and farm equity—were both unchanged in 2019 from a year earlier.

Chart 3  Chart 3: Solvency ratio—debt, Canada, 2005 to 2019
Solvency ratio—debt, Canada, 2005 to 2019

  Note to readers

The balance sheet of the agricultural sector provides the value of farm assets used in agricultural production, the liabilities associated with these assets and the farm sector equity as of December 31 for Canada and the provinces.

Assets and liabilities in the agriculture sector's balance sheet include those of farm businesses and non-operator landlords (for farm real estate assets leased to farm operators and the corresponding liabilities) and exclude the personal portion of farm households. This most closely reflects the assets and liabilities used in agricultural production.

The balance sheet of the agricultural sector integrates data already produced by Statistics Canada, such as farm debt, value of farm capital, livestock and crop estimates, farm product prices, and selected data from the Farm Financial Survey. These data are subject to revision.

Products

Thanking Canadian farmers

Canadian farmers play a critical role in Canada's food chain. The infographic "Thank you to Canadian farmers: Insights into their vital role in Canada's food chain," released as part of Statistics Canada — Infographics (Catalogue number11-627-M), is now available. This infographic in intended to thank Canada's farmers for their hard work.

The Agriculture and food statistics portal, which is accessible from the Subjects module of the Statistics Canada website, provides users with a single point of access to a wide variety of information related to agriculture and food.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).

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